tv Nightly Business Report PBS March 8, 2012 6:30pm-7:00pm EST
>> a lot is going to depend on, of course, what happens in europe, and what happens in oil markets. but most of the things we can look at to measure strength, exports, manufacturing, agriculture, investment-- they all look really pretty encouraging now. >> reporter: i'm darren gersh with treasury secretary timothy geithner in fort worth, texas. we'll hear more about oil prices and the economy. >> tom: some good news out of greece-- most lenders have accepted to take losses to keep the country from defaulting on its debt. >> susie: and here in the u.s., the focus is jobs. many of the new ones arein a n . 'll tell y who's hirg. it's "nightly business report"
for thursday, march 8. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: captioning sponsored by wpbt >> tom: good evening and thanks for joining us. u.s. stocks posted a second day of solid gains as investors continue focusing on greece and whether or not its lenders will take losses on their loans. >> susie: tom, we're hearing that over 85% of bond holders have agreed to swap their greek i.o.u.s for new ones, even if that means they will get less money. but the deal would allow greece
to get another round of bailout money, avoiding a messy default. >> tom: the threat of greece has been hanging over the global economy for months. today, u.s. treasury secretary timothy geithner tells nbr in an exclusive interview, he thinks americans can be more confident now that troubles in europe won't be a huge problem here. the treasury secretary went to fort worth, texas, today to tour you are in the fort worth area, an b nsf railway, account people in fort worth and dahlas and-- dallas have to worry about what is going on in europe. do he believe the worst is now behind us. >> i think you can say if you look back over the last 18 or so, the crisis in europe did a lot of damage to confidence around the world. it slowed growth in the united states quite significantly. it took a little bit of the wind out what was initially a pretty strong recovery here. and around the world people saw the effects on things they can measure and feel, exports fell, growth was
weaker, confidence was hurt. so as i said, over the last few months, they have done a much better job getting their arms around this and getting people more confidence around the world as they are going to contain the risk of crisis, that's very important so even if growth, europe is weaker, even though it is going to be a really difficult long road for them, i think people here in the united states and around, can be more confident now that europe is to the going to cause a huge amount of damage to the glob al economy or to our economy. >> reporter: you don't have another foreign shock. has the u.s. economy really turned a corner right now. >> the u.s. economy is grad ultly getting stronger and the policies are making the economy stronger. and a lot of risk and uncertainty out there still and we've got some ways to repair the damage caused by the crisis but i think we feel more resilient, we look more resilient amount of lot will depend on what happens in europe and what happens in the oil markets. but most of the things we can look at that measure strength, exports, manufacturing, agriculture,
investment, they all look really pretty encouraging now. >> reporter: what are you seeing right now in the u.s. economy in terms of the impact from oil prices. >> it's hard to seat impact now. i think people feel it because they really feel immediately the impact of higher gas prices right away. and but across the economy as a whole, oil prices now are mostly a reflection of the fact that growth is getting stronger here and around the world. outside of europe. and that combined with the fear of it saber-rattling around a run is what is pushing prices higher. part of it is growth, part of that is the concern of what is happening in iran. >> reporter: are we going to have another year where we start out really strong at the beginning of the year only to falter in the summer. >> you can't know but what is good about the united states, remember this, is that what caused growth to weaken or to slow in 2010 and 11, we're seeing outside the united states. we're not seeing internal in the united states except the debate about the debt limit. that was damaging to
confidence, a completely self-inflikted, avoidable shock to competence in the united states. people across, i won't say but you had people threatening to default on the nation's obligations for a sustained period of time and that hurt confidence. but the main thing that caused the economy to slow after early stage of recovery were the european crisis. the oil shock last year, and the tragedy in japan. as those have eased a little bit, our economy is showing more strength. >> the president was talking about oil prices yesterday. and he seemed to be saying that basically, look, oil is a global commodity and we don't very much control over the price of oil so first of all, is is that right. we don't have much control over the price of oil and second why is that message so hard for so many people to understand. >> what affects the price fundamentally is in the short term is the amount of growth and demand there is around the world. in the united states as well. that combined with what is happening in iran. of course we are engaged in a very important broad international ert to bring a huge amount of pressure to
stop them from acquiring nuclear weapons. >> on iran the president said recently that as command never chief he had to consider the economic costs of a potentially attack on iranment are you his chief economic advisor. what might those costs be. >> economic stakes are high but i think he should think about the broader security stake force the nation and for the world as all nations are. the reason why you see countries around the world joining pus in this broader effort is because they feel like we do. why it's is so important for their economic interests, for their national security interests, that we're able to effectively prevent iran from pursuing its nuclear ambitions. >> tomorrow we'll hear more from treasury secretary timothy geithner on corporate tax reform and keeping the u.s. economy competitive. >> susie: as we mentioned, stocks rose on optimism that greece is close to wrapping up an important debt deal with its creditors. the agreement is crucial so that greece can receive another round of bailout loans from the european union and the international monetary fund. the dow rose 70 points, the
nasdaq added 34, and the s&p up 13. more now on that greek debt deal. sylvia hall takes a closer look at what's at stake. >> reporter: it was a make or break day in greece. to avoid a messy and almost immediate default, 75% of greek bondholders needed to agree to trade their bonds for new, less valuable ones by today. it ks it looks like they made it. reuters reports more than 85% have accepted the deal. investors who opt in take a 53.5% face value loss. they also accept lower interest payments and agree to wait longer to get their principle back. over time, that means investors could take a hit of up to 75%. to call this deal completely voluntary, 90% of investors have to agree. if the number of willing bondholders falls between 75% and 90%, the greek government has said it will force holdouts to accept the deal.
that could trigger credit default swaps, or insurance against a bond not being paid. at this point, experts say that may be exactly what needs to happen. >> if credit default swaps aren't triggered, that will signal they may not be the hedge big investors thought they were. >> reporter: and the uncertainty could have a negative effect on that market. >> i think many investors will and certainly should ask themselves, "well, is the cds that i bought on portuguese, spanish, italian, irish debt worth anything? is there any conceivable political scenario that we can imagine where these will ever be paid out?" and i think the answer will be no, and that means that the entire sovereign cds market may be impaired if the greek cds does not trigger. >> reporter: but first, the official results from the bond swap are expected to come from athens early in the morning.
after that, the fate of the derivatives will be made in a separate decision. sylvia hall, "nightly business report," washington. >> tom: still ahead, exxonmobil c.e.o. rex tillerson says oil demand will surge 30% over the next 20 years. he tells wall street what the oil giant is doing to prepare for that. tomorrow, we'll get the latest look at the u.s. job market. it's expected to show its getting a bit easier for the unemployed to find work. but exactly where are the jobs now, and where will they be in the future? suzanne pratt takes a closer look. >> reporter: this is the new york office of ad agency arnold worldwide. a quick look around suggests it might be a cool place to work. clients are household names in a variety of industries, from lee jeans to everyone's favorite candy. and guess what? c.e.o. andrew benett says arnold has been on a hiring spree, adding 300 new u.s. jobs in the last two years. that's a 40% increase in staff.
more are coming this year. >> we anticipate to continue to hire at maybe a similar, maybe slightly slower pace than we've been hiring. but we expect it to continue. >> reporter: arnold worldwide is not alone in its hiring. the nation's unemployment rate has fallen for five straight months, and economists predict more companies will be filling those empty offices this year. still, job growth is picking up very slowly, but it is finally happening in many industries. a recent government study predicts america will get the most new jobs in healthcare in the current decade, followed by business and professional services, and then, surprisingly, in construction. experts say construction payrolls will get built up because so many jobs were lost during the great recession. here's another surprise-- executive recruiter dale winston expects we'll regain some factory jobs. >> i believe that there will be jobs in manufacturing.
they may not be the traditional jobs. they'll be the warehousing jobs, >> reporter: winston also expects lots of hiring in technology, particularly digital media, previously a somewhat mysterious fie. >> more people get it now, so there's been a lot of need for people with a good understanding and vision. >> reporter: which brings us back to arnold c.e.o. andrew bennett. he says the firm has 60 open positions, half in tough-to-fill social media. >> we're all going after a very similar pool of talent-- so, kind of modern, progressive, talent today, people that are very active and engaged at a minimum level in social media. >> reporter: to be clear, the u.s. still has a long way to go before the 13 million unemployed americans find work. but every job helps. suzanne pratt, "nightly business report," new york.
>> susie: for more on the job outlook, we turn now to gary burnison, c.e.o. of korn ferry, the world's largest executive recruiting firm. he's also author of the 12 absolutes of leadership, hi, gary. >> hey, susie. >> susie: you heard suzanne's report that says the unemployment rate has dropped known five straight months in a row. from your perspective s the job market improving? >>. >> well, it's improving but i what say it's kind of a comparison, you know, of an f-16 versus a heavy cargo air krachlt i mean the plane's off the ground but it's certainly not the way it was in the 80s or 90s or mid 2,000. we're lacking the jet fuel which is really the consumer spending but directionally, yes, it's getting better. >> so tomorrow if the employment reports that's issued in the early morning from the labor department comes out way really strong number showing american businesses are hiring, would you feel like we're on the right momentum towards an improvement in the job market?
>> well, we're headed the right way. but i've said for some time this is a nike swoosh. and i was listening to treasury secretary geithner talking about, you know, foreign shocks in greece. i mean corporate, i spend a lot of time with corporate pos. they're not investing because of greece. that's not the reason. the reason is because there's no growth in the top line. c.e.o.s are trying to derive innovation but the consumers just not there in terms of foreign shocks, i think what people are discounting and the impact on americans is china. i mean china economy, i spent two months there, living there. china's economy has cooled substantially by design because inflation was so high. but that could have a big impact on, believe it or not, american jobs. >> susie: so tell me, you talked to a lot of c.e.o.s. and what are they telling you, whether it is the china effect or what is going on in the u.s. what are their hiring plans? >> well, right now, i mean they're struggling. there is a fight for growth and relevancy. they're traying to drive the top line.
corporations are sitting on a lot of cash and that's really good news but you know, people are, you know, there are more for less. i mean they're expecting more out of the workers today then they've ever had. but at some point that will run its limit. and there will have to be hiring. but the hiring will be much different than ten areas ago. >> we have less than a minute from your experience what trends are you seeing where there are pockets of hairing, what are the sectors that are hiring and where are the weak area. >> well, i'll tell you what is very hot right now is convergence. companies traying to sell their products through social media, digital, anything like that is very hot. if you've got any of those skills employers are hiring. that's for sure. life sciences and health care, another very, very good area. on the other side of the barbell is financial services. a great deal of uncertainty. with the regulatory, you know, volker rule and all of that. that is not a good place but life science, technology, digital media, very healthy
today. >> suzanne: all right a lot of good information. gary, thank you so much for companying on the program. >> thank you. >> susie: we've been speaking with gary burnison, c.e.o. of korn-ferry, international. >> susie: exxonmobil said today it plans to spend $185 billion over the next five years to develop new supplies of energy. meeting with analysts here at the nyse, c.e.o. rex tillerson also said there are currently
adequate oil supplies in the market in the event that iran closes the strait of hormuz, and there are many options to make more crude available. >> with the use of strategic reserves and stockpiles, and then governments could step in and mandate a kind of run on the bank, a run on the pump, with rationing like what was done 30 years ago-- odd/even license plates, things like that. there are a lot things you can do so people are able to go about their daily lives largely unaffected. >> susie: and you know, tom, despite those assurances, and an upbeat outlook on exxon, the stock still fell slightly today to $84 a share. >> tom: and crude oil prices are up today 107 dollars per barrel. let's get everybody updated with the rest of tonight's market focus.
the major stock indices have made up most of what was lost earlier this week. looking at the past five sessions of the s&p 500 shows the stiff sell-off monday, but those losses have been erased by the close this afternoon, with today's almost 1% gain. and with optisrdm rega ling greece's latest bailout, the materials and industrial stock sectors led the gainers, but we also saw the more traditional defensive health care sector add more than 1%. fueling the health care gains was a mix of companies. medical device maker boston scientific rallied 3.5%. medicine supply company mckesson jumped 3% to its highest close since late may. and bio-pharmaceutical firm biogen idec closed just shy of a new high, up almost 3%. speaking of health care, johnson and johnson has been battling against lots of drug recalls over manufacturing issues.
today, it got some encouraging news-- a new drug improved the survival of men with prostate cancer who hadn't undergone chemotherapy. shares were up a fraction. they haven't be able to pierce $66 dollars per share since the summer sell-off. the j-n-j news pushed around others in the prostate medicine business. medivation jumped 14% on big volume. it's co-developing a similar treatment. but dendreon fell 7% as its provenge prostate cancer drug may see some new competition. also in the world of new competition-- starbucks unveiled a new single-serve coffee system. the single-cup business has been growing as it presents a wide profit margins for companies. shares of starbucks were up about 2% on the after-the-close announcement. this is a new closing high for shares, coming on heavier volume. and look for it to build tomorrow. the stock added another 3.5%
after the close, trading around $52. it presents a big new challenger for green mountain coffee roasters. shares fell 2% during the session, but plummeted 20% after the closing bell, falling to around $50. green mountain is the leader in the single-serve coffee biz; now, it will face off against starbucks. the shortest month of the year failed to keep up with growth expectations at the golden arches. mcdonald's same-store sales rose 7.5% last month, but that was less than what analysts were expecting. the restaurant pointed to smaller government budgets in europe and inflationary pressures in the u.s. for coming up short. volume quadrupled today as share's fell 3%, down to a three-month low. american taxpayers own a little less of a.i.g. tonight. the treasury department sold part of its stake in the company, selling stock at $29 per share. the new supply of stock on the market weighed on a.i.g., falling almost 4%. by selling at $29, the price
effectively paid by the government of its bailout was $28.73 per share. and that's tonight's "market focus." >> susie: tax time is here, and people are scrambling to get their taxes ready for the april filing deadline. but have you ever tried explaining taxes to your kids? with some tips, here's nealedfrg godfrey with tonight's "kids and cash." she's chairman of the children's financial network. >> tax time is approaching, and your kids pick up on your grumbling. explain to your kids that taxes are the money we must give the government to pay for things like schools, firefighters, and police officers. there are different kinds of taxes, but the two that will affect your youngster most directly are income and sales tax. everyone who lives and works in
the u.s. has to pay taxes. explain that that is fair because those people enjoy and use the services that the government needs to pay for. sales tax is a surcharge that is added to specific items that you buy, like food, clothes, gas, toys, etc. the next time you are in the store, show your kids a receipt and let them find the sales tax. explain that most people also have to pay income tax, if they earn a certain amount of income. its time to bring home this concept, but give your kids a break. i recommend that you take 15% out of each allowance payment so they can put it into a tax jar. then, you as a family-- your government-- will vote on how you want to spend the money. it wont be much, maybe only enough for a trip to the ice cream store, but it will start to get the point across. hopefully, this early exposure to taxes will help to avoid, what i call "paycheck shock." remember thinking, "who is fica and what is he doing taking money out of my paycheck?" i'm neale godfrey.
>> tom: here's what we're watching for tomorrow: as we mentioned, its jobs day. we'll see how many new jobs americans found in february, and if predictions for 200,000-plus hold true. economist diane swonk joins us to go through the jobs report, and look ahead at next week's federal reserve meeting on interest rates. our friday "market monitor" guest is scheduled to be jack ablin of harris private bank. >> susie: and finally tonight, are you feeling richer? according to the federal reserve, the net worth of american households increased by $1 trillion in the final three months of last year. net worth is total assets, like homes and stock portfolios, minus liabilities, like mortgages and credit card debt. the nation's total household wealth is now $58 trillion. sounds like a lot, but it's still below pre-recession levels. speaking of net worth, the nation minted a couple of new billionaires last year. esforb is out with its annual list of billionaires-- 1,200 people made the list.
the top names are familiar: the world's richest man, mexico's carlos slim; right behind him, bill gates and warren buffett. but there are a few newbies, including elon musk, co-founder of payl unand fofoder of tesla motors; and sara blakely, who's made her fortune helping others ok good.d blakely is the woman behind the spanx brand of shapewear. and tom, at 41, she's the youngest self-made female billionaire, a special recognition on this international women's day. >> helen: very good, congratulations to her. >> and to all of them. >> susie: that's "nightly business report" for thursday, march 8. we want to remind you this is the time of year your public television station seeks your support... >> tom: ...support that makes programs like "nightly business report" possible. >> susie: thanks for joining us, and don't forget to support your public television station. i'm susie gharib. good night, everyone. you, too, tom. >> tom: good night, susie. i'm tom hudson. we'll see all of you again tomorrow evening. "nightly business report" is made possible by: